Summary: This article discusses some strategies, including different contract clauses, that employers might use to try to control where you can sue them, or to try to sue you in a far-away place.
If you are in a legal dispute with your employer, where the lawsuit is filed can make a big difference. That affects who the judge is or who might be on the jury. Exactly where a lawsuit can be filed depends on the nature of the legal claims in it. However, two basic principles generally apply. If there are multiple permissible options of where to file suit, the party filing suit gets to choose where to file suit. However, the location must be somewhere that has “personal jurisdiction” over the defendant—i.e., the defendant has to have sufficient connections to the location for it to be legally “fair” to sue them there. This article, however, explores ways that employers may try to get around these basic principles through contracts containing “forum selection” or “venue selection” clauses.
While Texas is an at-will state and sometimes you may have next to nothing in writing from your employer that controls the terms and conditions of your employment, your employer might force you to sign things like a non-compete or an arbitration agreement as a condition of employment. Those may contain language trying to force any disputes to be heard somewhere specific to get around the usual rules for where they should be heard.[1] This can potentially result in situations where you, a Texas employee, are either sued or have your lawsuit moved to a location far from you or even out of state. This might also result in non-Texas employees being sued or forced to only sue in Texas.
A “venue selection” clause requires disputes be heard in a particular location or court (venue) in a state. For example, an employer might try to force a dispute to be heard in El Paso even though you worked in Dallas. Fortunately, unless the particular legal claim at issue would otherwise allow that dispute to be heard in that venue, those sorts of requirements are unenforceable. So, if for instance your employer sued you to enforce a non-compete in a county far from where you actually live or work while claiming you agreed to that venue in the non-compete, you or your lawyer may be in a position to file a motion to transfer venue in that case.
A “forum selection” clause is broader, and selects the state where a dispute is to be heard. Paradoxically, even though a totally different state can be even more inconvenient, Texas is more accepting of these clauses. By default, Texas courts will enforce forum selection clauses unless you can “clearly” show that doing so would be unreasonable or unjust, or that the clause is invalid due to fraud or some similar reason. Texas courts can effectively treat these sorts of clauses as ways to get around the usual “personal jurisdiction” requirement mentioned above.
Unfortunately, the issue of forum selection is one where the forum hearing the argument about forum selection matters a lot: different judges may have very different ideas of what is unreasonable or unjust. Still, situations where the forum being chosen is “seriously inconvenient” for you at trial or the forum chosen would avoid a “strong public policy” of the otherwise-proper state are two areas where Texas courts generally will not enforce a forum selection clause. In re AIU Ins. Co., 148 S.W.3d 109, 112 (Tex. 2004). In that situation, you or your lawyer might consider filing a motion to dismiss so that the lawsuit can be refiled in the proper forum.
It is important to keep in mind that, given these differences, employers may try to dress up an unenforceable venue selection clause as a forum selection clause to get around the law. Employers may also try to use pro-arbitration court decisions in Texas to get around the usual rules for venue selection, in the case of an arbitration agreement.
If you are in a dispute with your employer and are concerned about how a contract with it might affect your rights, you should talk to an employment lawyer like those at Rob Wiley, P.C.
[1] This is different from language like “choice of law” or the enforceability of arbitration agreements.